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05.15.18

Xiaomi, Samsung, TCL and Others Demonstrate That in a World With an Abundance of Stupid Patents Like Design Patents Nobody is Safe

Posted in America, Apple, Asia, Samsung at 9:26 am by Dr. Roy Schestowitz

Zach Snyder patent

Summary: The “Cult of Patents” (typically a cabal of law firms looking to have everything on the planet patented) has created a battlefield in the mobile world; every company, once it gets big enough, faces a lot of patent lawsuits and dying companies resort to using whatever is in their “portfolio” to destroy everyone else inside the courtroom (or demand ‘protection’ money to avert lawsuits)

SEVERAL days ago we wrote about failing mobile giants (Coolpad included) resorting to litigation. This is nowadays happening in China as well. As an Asian news site put it yesterday:

Smartphone maker Coolpad has sued Xiaomi for infringement of three patents that are associated with the user interface.

The company Coolpad asked a Shenzhen court to cease selling Xiaomi smartphones five.

Another Asian site (south Asia) mentioned it yesterday, albeit only among many other topics:

“Interesting patents – Voting just got interesting, Wear healthy, stay healthy!, Supreme Court issues notice to Nuziveedu Seeds, Coolpad Sues Xiaomi, Brazil & EU reject Gilead’s patent on hepatitis C & HIV drugs, Peripheral claiming versus Central claiming, Patent Tip of the week and other Weekly Patent News,” presented by the Patent attorneys and experts of BananaIP Counsels, India’s leading Patent Firm.

This isn’t the only legal battle Xiaomi is facing. On the patent front, as mentioned yesterday, there’s also the Shenzhen-based Yulong:

A lawsuit filed in China last week accused Beijing-based Xiaomi of developing mobile devices which contain patent infringing technology.

The complaint was filed at Jiangsu Province Nanjing Intermediate People’s Court on Thursday, May 10.

Yulong Computer Telecommunication Scientific (Shenzhen) Company, a provider of telecommunications equipment and a subsidiary of Coolpad Group, initiated the suit.

The complaint accused Xiaomi, a developer of consumer electronics and software, of infringing one of Yulong’s invention patents (Chinese patent number ZL200610034036.7). The patent covers a “multi-mode mobile communication terminal interface system and method for call recording”.

Further east in Japan Kyocera is becoming litigious — a rather rare thing for Japanese firms. It’s actually suing German companies in Germany using ‘haptic’ patents. Here are some details:

Japanese conglomerate Kyocera has very rarely asserted its patent rights in recent years; but a recent deal with Bosch and an assertion against another German supplier show that even in traditionally conservative Japan, the potential prize represented by the auto sector is too big to ignore. Last Tuesday, the company announced a licence agreement with Robert Bosch Car Multimedia, a subsidiary of industrial conglomerate Bosch. The noticed disclosed only that the German firm would gain access to haptic feedback technology for use in automotive solutions. This deal came just one month after Kyocera launched a German patent litigation suit against another auto parts supplier – Preh GmbH…

Right next to them in Korea there’s a battle Samsung faces half a world away — in the United States. Apple is dragging Samsung back to court — a patent battle that receives a lot of media attention (e.g. [1, 2]) mainly because Apple is involved. Corporate/mainstream media has a rather poor grasp/understanding of the case, so it’s mostly repeating superficial claims (without proper assessment/fact-checking/healthy level of scepticism). To quote Tech Spot‘s background to this (objective chronology of events):

Apple and Samsung are back in court over a patent dispute that started back in 2011. This will be the third court appearance over the same five design infringements. Two of the patents involve the front and back look of the original iPhone. A third violation is over the GUI (graphical user interface), and two others concern software functionalities such scrolling and pinch to zoom gestures.

In 2011, Apple sued Samsung claiming the South Korean company’s phones, including the Galaxy S2, copied the iPhone in both physical and software design. The Cupertino-based firm was awarded over one billion dollars in 2012. The judge in the case reduced the award to around $940 million citing that the jury had made an error in its calculations. A second trial resulted in the award amount being further reduced to about $400 million.

For a better, in-depth analysis of this we suggest reading informed blogs. We previously wrote about the design patents at hand [1, 2] and so did Josh Landau (CCIA), who last night noted that “[i]f design patents on a small piece of a product can regularly be applied to the profits on the entire product, it will have a huge impact on whole swaths of industry—many of them far from the high-tech sector.”

Indeed. Apple’s designs aren’t even particularly clever; some are downright laughable!

As Landau put it:

A district court trial. A retrial, after part of the verdict was vacated. An appeal to the Federal Circuit. A Supreme Court opinion with a remand to the Federal Circuit. A remand from the Federal Circuit back to the district court. Seven years after Apple originally filed suit against Samsung, we’re right back in Judge Koh’s courtroom for the sixth part of this dispute, a third jury trial on damages.

[...]

If design patents on a small piece of a product can regularly be applied to the profits on the entire product, it will have a huge impact on whole swaths of industry—many of them far from the high-tech sector. Those industries will be placed at risk of in terrorem threats of litigation and chilling effects on product design and development. Disgorgement of total profits on the whole product for a design patent covering only a small component will reduce willingness to work with smaller suppliers who can’t indemnify the manufacturer. It will make manufacturers seriously reconsider providing open access to their systems. It might even drive a wave of design patent troll lawsuits.

Another decent analysis came from Florian Müller, who has been following these trials for 8 years. Here’s his latest:

There we go again. For the fourth time in six years (minus a few months), Apple and Samsung will square off again, starting today, in the San Jose building of the United States District Court for the Northern District of California. It’s the third trial in the first Apple v. Samsung case (the related complaint was filed in April 2011) and the fourth in total (if we add the 2014 trial in the second case, filed in 2012).

Via Twitter I provided the parties with a link to the Guinness Book of Records website. This might be a new record: four trials between the same two parties in one federal district court within less than six years.

In some ways, it’s déjà vu all over again, or Groundhog Day, as Korean-American Judge Lucy H. Koh calls it. But not in all ways. Samsung scored a major victory in the Supreme Court in 2016 on what should be considered the appropriate article of manufacture for determining design patent damages in the form of a disgorgement of unapportioned infringer’s profits under 35 U.S.C. § 289. Apple had been awarded huge amounts at two previous trials, based on a standard overthrown by the highest court in the land. Now it will be up to a jury whether the ultimate outcome will, or will not, be reflective of Samsung’s SCOTUS victory.

There’s the legal part, which is a test that the U.S. government laid out in an amicus curiae brief filed with the Supreme Court. That one is suboptimal, and people far more qualified than me to discuss design patent law find it wanting. There are various restrictions on the parties, especially on Samsung, as to what kind of evidence and testimony they’re allowed to present and what kinds of argument they’re allowed to raise. And what may ultimately decide is psychology: whether the jury will, or will not, buy Apple’s portrayal of Samsung as a copyist.

What will happen at the end? Well, we hope that not only will Apple’s case collapse but design patents as a whole will collapse as well, in due course. Nobody benefits from these except patent lawyers, who already made a fortune from these pointless patent disputes between Apple and Samsung.

We suppose that one day in the not-so-distant future Apple will become another BlackBerry. Apple may become just a pile of patents and a long list of lawsuits. This certainly is what happened to Ericsson, whose latest news isn’t about a product but about a lawsuit (Ericsson Inc. et al v TCL Communication Technology Holdings Limited et al). Ericsson no longer does much except feeding patent trolls and suing lots of companies using patents. Now it wants millions for doing nothing at all, just sitting on a bag/bundle of very old patents:

The court granted plaintiff’s motion to reconsider an earlier order granting defendant a new damages trial and upon reconsideration reinstated the jury’s $75 million verdict because the extensive evidence of unaccused products was not reflected in the verdict.

Notice the trend in all the above cases; companies love to brag about patents being “defensive” and all, but once their real business grinds to a halt all they have to show for it is a list of lawsuits. This means that the underlying problem is the patents themselves, not only who uses them and when.

05.12.18

Companies in the Red Resort to Patent Litigation Rather Than Creation

Posted in America, Apple, Asia, Patents, Samsung at 10:23 am by Dr. Roy Schestowitz

Coolpad
Reference: Coolpad

Summary: A little update about patent litigation involving Apple, Samsung, Huawei, Xiaomi and even the dying Coolpad

THE DEMISE of BlackBerry (like a hundred-fold decline in terms of revenue) has meant that it is being reduced — however gradually — into a patent troll. The company’s patent activities are being noted in this new article, “What’s Driving Our $11 Price Estimate For BlackBerry?”

But BlackBerry isn’t alone because Apple follows its footsteps and so did Nokia. Florian Müller spent years keeping abreast of Apple and Samsung patent disputes and just before the weekend he covered the latest twist, citing that old judgment from the courts of the Northern District of California (in anticipation of another):

We’re just days away from yet another Apple v. Samsung trial in the Northern District of California. IT’s a re-retrial over damages, following a trial, a retrial, Samsung’s successful appeal to the Supreme Court and various other procedural steps on the way back to where we are. By the way, the dispute started more than seven years ago (mid-April 2011).

Judge Koh’s final jury instructions will inform the jury of the relevant factors for the article-of-manufacture determination. If the jury determines the relevant AoM is an entire smartphone, Apple gets a huge damages award. If the jury concludes the casing/screen is more reasonable, then the amount will be less extreme amount, but still a chunk of money.

[...]

“Determinative” is not part of everyday language, but it isn’t too uncommon either. Reasonably educated people should figure out what it does mean and what it doesn’t. Numerous other passages of the preliminary and final jury instructions contain words that jurors may misunderstand in similar ways as Apple fears.

The parties couldn’t agree, so Judge Koh will have to decide. Technically, “not determinative” is simply accurate. In colloquial language, one could add a few words like “in their own right,” though one could also argue that any additional words could create confusion, too.

Generally speaking, Judge Koh’s proposed preliminary and final jury instructions combined don’t really tell the jury much about how to make the article-of-manufacture determination. For an example, the amicus curiae brief filed by the Obama Administration with the Supreme Court contains additional helpful guidance that Judge Koh could, but apparently won’t, provide to the jury.

There’s an additional article about it: [via Müller]

The U.S. District Court for Northern California will be rehearing arguments next week in a major design patent case between the two tech giants Apple and Samsung. The case could very well be a turning point for the future of the tech industry. Major technology companies have largely weighed in on the side of Samsung as the industry worries about the long term impact of the case and its potential to empower a new breed of design patent trolls and encourage more litigation.

Apple Inc. launched a tense legal fight over whether some design features of its iPhone were infringed upon by Samsung devices. The dispute resulted in a longstanding legal dispute which eventually made its way to the U.S. Supreme Court. Apple argued that it could claim remedies equivalent to the total profits of an entire smartphone if even one design patent was found to infringe. This awarding of total profits came from a 19th century law written long before a multifunctional device as complex as a smartphone could be imagined.

Watchtroll, a site friendly to the litigation ‘industry’, has publishedApple v. Samsung Retrial: An Opportunity to Finally Clarify Design Patent Law” (there’s no lack of clarify, they’re just protesting the status quo, as usual).

Another site of patent maximalists took note of this lawsuit against Apple — one that we covered last weekend and the week before that. “Apple has built its success on innovative products,” it said. “It has sought to protect this innovation through patents and registered designs. Apple is no stranger to asserting its patents and designs against its competitors but it is also regularly on the receiving end of third parties asserting their patents.”

Well, Apple isn’t particularly innovative; it just tells this lie to itself and to its hardcore ‘followers’ (loyal clients), who perpetuate such myths. It’s true that Apple uses patents on designs — not mere trademarks — to go after rivals, including Samsung. We spent years ranting about several such examples. There was nothing innovative about these designs; some were downright laughable — something that a young child could easily some up with in a matter of minutes.

Earlier today Müller looked eastwards again and took note of patent lawsuits by China’s government-connected giant (Huawei) versus Korea’s giant, which isn’t so government-connected because South Korea is capitalist, not Communist. He spoke of what Huawei had done in the US using patents:

Procedurally, this is an appeal to the Federal Circuit, based on the rule that any case involving at least one patent infringement claim must be appealed to the Federal Circuit, which, however, applies the law of the regional circuit in question if an issue is not about patent law in a strict sense (infringement, validity etc.). So in this case, the Federal Circuit will act as if it were the Ninth Circuit–or at least it will try to.

[...]

As for political/diplomatic implications (also called “international comity”), it’s actually a positive thing for Samsung in this case that it’s not a U.S. company. In some other cases, such as Apple v. Samsung, it would benefit from it, but in this dispute with Huawei and in times of “trade war,” it’s a good thing that this is a dispute between foreign companies–and let’s not forget that the Northern District of California was Huawei’s venue choice when it brought its cross-jurisdictional complaints.

Earlier this year we said that China's patent policy would drive out companies not only from the US but also from Korea (LG for instance). There’a also a number of disputes among Chinese firms, so it causes domestic feuds (waste of commercial resources). The following is not the start of it, but it is the latest example where a company is trying to ban actual products of another company (Coolpad v Xiaomi):

After noticing intellectual property right violations three months ago, Coolpad notified Xiaomi and since the latter hasn’t yet taken any action, Coolpad has requested that eight Xiaomi devices be recalled from the market. In addition to that, the company also wants compensation for economic losses resulting from patent infringement.

Coolpad filed the lawsuit through Yulong Computer Technology, their subsidiary company, at the Shenzhen Intermediate People’s Court. One of the patents behind this controversy is related to software, being termed as ‘method for implementing call record interface system of multi-mode mobile communication terminal,’ as per MyDrivers. Other infringements relate to app icon management, notifications and the system’s user interface (UI).

Here is another report about that:

Coolpad has filed a lawsuit against Xiaomi regarding patent infringement. From a hint revealed by the company’s CEO, it was thought that the lawsuit has been settled outside the court. But that’s not the case. Coolpad has come up with an announcement that the lawsuit it filed against Xiaomi is before the Shenzhen Intermediate People’s Court. Notably, the lawsuit has been filed by Yulong Computer Technology, its subsidiary.

At the top of this post we included a summary sheet of Coolpad because we are hoping to show the reason for such a dead-end strategy. If Coolpad cannot sell much anymore, then perhaps it’s thinking of just taxing other company’s products.

04.19.18

Microsoft’s Lobbying for FRAND Pays Off as Microsoft-Connected Patent Troll Conversant (Formerly MOSAID) Goes After Android OEMs in Europe

Posted in Europe, GNU/Linux, Google, Microsoft, Patents, RAND, Samsung at 4:38 am by Dr. Roy Schestowitz

Royalty stacking until free/libre platforms become very expensive

Coin stacking

Summary: The FRAND (or SEP) lobby seems to have caused a lot of monopolistic patent lawsuits; this mostly affects Linux-powered platforms such as Android, Tizen and webOS and there are new legal actions from Microsoft-connected patent trolls

EARLIER THIS week we wrote a couple of short articles that alluded to Samsung’s small victory over Huawei. For those who don’t know, Huawei is a highly government (or regime) connected entity, more so than a corporation as is known in Western democracies. Huawei nowadays uses patents in an effort to embargo the competition, but that hasn’t been particularly successful outside China (where government connections help). The Asian giants almost always use Android; this includes Huawei and Samsung, which also has the Linux-based Tizen (LG has the Linux-based webOS). As one site put it yesterday:

Back in January, we updated you on the Huawei vs. Samsung patent infringement lawsuit. The big news was that a Chinese court found in favor of Huawei in that dispute.

The patent infringement had to do with Samsung using Huawei’s cellular technology and software patents in various Samsung devices, without paying Huawei the necessary licensing fees. Samsung denied any wrongdoing (as usual), but the court said that Huawei’s patents were indeed infringed upon, and Samsung would have to pay a fine and halt Chinese production and sales of the infringing devices.

Docket Navigator also wrote about Huawei Technologies Co., Ltd. et al v Samsung Electronics Co., Ltd. et al, showing that the US patent system/law suddenly becomes friendlier (to engineers, not lawyers) than China’s. To quote:

The court granted defendant Samsung’s motion for an antisuit injunction prohibiting plaintiff Huawei from enforcing injunction orders issued by a Chinese court and found that the Chinese injunction orders would frustrate domestic policies.

Boasting a new Samsung patent that we criticised the other day, this one new article says, “Samsung May Use Top Notch in Their Future Phones, New Patent Spotted in China” (so Samsung remains in China in the long run).

LG has already been driven out of China, or least partially. Patent lawsuits accomplished that.

As for Samsung, as we said and showed some days ago, it’s a top target for patent trolls. PACid, for example, is a patent troll whose latest action (against Samsung) belatedly got the attention of Watchtroll.

What we’ve only just noticed (this morning) is this update about MOSAID (now known as “Conversant”) with its litigation campaign in Europe. This Microsoft-connected (and Microsoft-armed) patent troll is still actively harassing companies with litigation in London. It’s nowadays going after Huawei and ZTE. To quote:

Does the English Court have jurisdiction to grant relief in the form of a global FRAND licence in relation to a claim for infringement of UK patents, where UK sales account for only 1% or less of worldwide sales on which royalties are claimed? This was the subject of the decision of Carr J. in the Patents Court on Monday in Conversant Wireless Licensing S.A.R.L v Huawei Technologies Co. Ltd, ZTE Corporation and Ors [2018] EWHC 808 (Pat). The answer – on the facts of this case as explained below – was “yes”.

[...]

Conversant commenced proceedings in July 2017, claiming that the Defendants were infringing 4 EP(UK) patents, and sought a determination of FRAND terms for its global SEP portfolio. Conversant’s global portfolio of patents includes SEPS in over 40 countries.

[...]

It was common ground that Art 24(4) (validity of IP rights) and 27 (court first seised) of the Recast Brussels Regulation would require the English Court to declare of its own motion that it had no jurisdiction to adjudicate upon cases concerning the validity of (non-UK) European patents. The Court also assumed that the English Court had no jurisdiction to adjudicate upon cases in which the dispute concerned validity of non-European patents. The Defendants however maintained that Conversant’s claims are in substance claims for infringement of foreign patents – which therefore depend on the validity of foreign patents, which the English Court has no jurisdiction over.

Although Huawei did not formally challenge jurisdiction in Unwired Planet [2017] EWHC 711 (Pat), it did rely upon some jurisdictional arguments to support its argument that a global licence was not FRAND, including that a worldwide FRAND determination in the English Court would undermine existing infringement and validity proceedings in Germany. Carr J. referred to the “simple” and “compelling” analysis of the judge in that case, where it was held that the Brussels Regulation and CJEU case law has nothing to do with what the terms of a FRAND licence should be.

What’s noteworthy about the case is: 1) it’s happening in Europe and 2) there’s a Microsoft connection. Microsoft was never able to blackmail Huawei over its Linux use, but later it managed to do this through Nokia, which also passed (at Microsoft’s instructions) patents to MOSAID (the same troll as above, owing to a rename/rebrand).

Microsoft might think it’s pretty clever by telling us that it “loves Linux” or “uses Linux”. But we’re not stupid enough to not see where patents come from.

04.17.18

For Samsung and Apple the Biggest Threat Has Become Patent Trolls and Aggressors in China and the Eastern District of Texas, Not Each Other

Posted in Apple, Asia, Patents, Samsung at 2:00 pm by Dr. Roy Schestowitz

Samsung and Apple ought to unite against software patents rather than waste money (legal fees) fighting one another in court

Korean dancers

Summary: The latest stories about two of the world’s largest phone OEMs, both of which find themselves subjected to a heavy barrage of patent lawsuits and even embargoes; Samsung has meanwhile obtained an antisuit injunction against Huawei

LAST year we explained why Apple should care about software patents and work against them rather than leverage them against rivals. VirnetX has once again won a legal case against Apple, relying on questionable USPTO patents. The lawyers have just issued a press release about the ruling, which was covered in many hundreds of sites last week. We mentioned the latest ruling as well.

A week later IAM wrote about the Pantech story, which basically involved passage of many more patents to Apple. Those are USPTO patents:

Apple has acquired a portfolio of 27 US patents from Korean smartphone maker Pantech, according to assignment records filed with the USPTO. The transfer follows the iPhone manufacturer’s purchase last summer of a package of 11 patents from Korean NPE Goldpeak — assets which were originally owned by Pantech. The latest portfolio appears to be largely focused on wireless technology and all of the grants have been made since 2012. Pantech is a Korean smartphone maker which has struggled in recent years as its local rivals LG and Samsung have thrived in the handset sector.

This isn’t really a solution to Apple’s problems because when patent trolls like VirnetX come knocking they just don’t care what patents you have (or haven’t). It doesn’t matter to them. These cannot impact trolls. What about Apple’s archrival (in phones) Samsung? Watch this latest news from Asia [1, 2]. This is not innovation (prior art, abstract etc.), so why patent that? As one article puts it, “[s]everal Chinese OEMs have done it. OnePlus is set to adopt it as well for their next smartphone. And now, it seems that Samsung is also willing to use the notch for one of their upcoming smartphones if the leaks are to be believed.” Maybe they hope that by patenting every little ‘brainfart’ (thought) they’ll better cover prior art in patent form. Maybe. Perhaps this is why Apple still stockpiles patents and Samsung rose to the top position of US patenters (even though it’s not an American company). We wrote about that last week in relation to some trolling Samsung had experienced. More (belated) coverage about last week’s patent lawsuit against Samsung is surfacing this week. WIPR wrote:

The fingerprint authentication methods featured in some of Samsung’s phones contain software that infringes patents owned by a data encryption firm, according to a claim filed earlier this month.

PACid Technologies filed the infringement complaint at the US District Court for the Eastern District of Texas, Marshall Division, on April 6.

Data encryption research firm PACid owns patents which form a crucial part of the encryption specification necessary to secure a wireless local area network which provides the basis for Wi-Fi, according to the company.

PACid is a patent troll. IAM called it “NPE” (as usual) because IAM is a patent trolls’ lobby. As it turns out, Apple too is/was being targeted:

There is a story going around in the Korean, Chinese and English-speaking media suggesting that Samsung Electronics faces a $2.8 billion patent infringement claim related to biometric technologies from US company PACid. This looks like a possible case of media mis-reporting. More interestingly, Samsung is facing down another challenge also based on its touch-to-unlock feature, this one from what looks like a new Korean NPE. First, in a case that has generated headlines for what is allegedly an eye-watering damages claim, Samsung Electronics is facing a lawsuit from PACid alleging infringement of two US patents related to user authentication.

Speaking of Samsung, IAM’s Adam Houldsworth mentioned it yesterday in relation to the Humira biosimilar settlement. “With the recent announcement that it had reached a settlement in its patent dispute with Samsung Bioepis,” he wrote, “AbbVie has scored another significant victory in efforts to delay market entry to biosimilar versions of its drug, Humira. While allowing Samsung to launch its product in European jurisdictions later this year, the deal keeps the copycat arthritis treatment out of the lucrative US market until 2023.”

IAM also reminded us that China is a lot more extreme than the US when it comes to patents, especially on standards (SEP). To quote the outline:

On Friday, United States District Judge William Orrick ordered Huawei not to enforce the two SEP injunctions it was granted against Samsung in the Chinese city of Shenzhen until his court has had its say on the same issues. The decision has dealt a major blow to Huawei’s efforts to bring Samsung to the negotiating table through quick wins in Chinese courts. The two parties have reportedly been negotiating a cross-licence since 2011, but it was Huawei that struck the first blow in court, filing infringement and FRAND actions in both Chinese and US venues in May 2016.

This was also covered by a longtime watcher of Samsung/Apple on the same day. He said:

Friday the 13th wasn’t Huawei’s lucky day, but it went well for Samsung: in accordance with an inclination he expressed at a recent motion hearing, Judge William H. Orrick of the United States District Court for the Northern District of California decided to enjoin Huawei from enforcing two Chinese standard-essential patent (SEP) injunctions against Samsung until a breach-of-contract question has been adjudicated in the U.S., where a trial is scheduled for December…

[...]

As you might imagine, I’m proud of having accurately predicted the decision (based on the motion and Ninth Circuit precedent). I’m now predicting affirmance by the Ninth Circuit. For a final “See I Told You So,” I’d like to note that last month the Federal Circuit completely vindicated my longstanding “fair use is a fairy tale” position on Oracle v. Google. I’m not going to talk about the merits here anymore. I wrote so much about it from 2010 to 2016 that there’s no point in reiterating and rehashing all of that old stuff. All sorts of people who bashed me in earlier years were simply wrong: I didn’t take those positions for any other reasons than wholeheartedly believing in them, and those positions can’t have been as unreasonable as my detractors alleged. Otherwise, a Federal Circuit panel wouldn’t have supported my positions unanimously in two separate decisions. That said, should Google file a petition for writ of certiorari (request for Supreme Court review), which is a given absent a settlement, I’d really like the top U.S. court to provide definitive clarity on some key software copyright issues. I’d hope for affirmance there as well, but I really believe the issues are important enough for the software industry at large that cert would be warranted.

What we’re finding more curious about this is the changing approach of China, which now seems to 'out-Texas' Texas. Korean companies are impacted while some of them let go/relieve their patents for cash (e.g. Pantech’s sales to Apple).

04.13.18

Samsung is the ‘New IBM’, Sans the Trolling With Patents

Posted in America, Asia, IBM, Patents, Samsung at 5:18 pm by Dr. Roy Schestowitz

IBM has itself become nothing but a trolls' feeder and patent bully

IBM floppy

Summary: The ‘relic’ company, IBM, loses its patent leadership (as measured using some yardstick) to Samsung, a company which is relatively calm when it comes to patent activity (unless/only when sued, as happens a lot nowadays)

SIZE matters. Especially when it comes to patents. Samsung is a very large company that employs a huge number of people and is viewed as a national asset. It’s to Korea what IBM used to be for the US. Samsung has already been ‘king’ of patents at the EPO and now IBM see itself dethroned in its own country. Reports and analyses have recently suggested that Samsung silently became ‘king’ of patents at the USPTO. We’ll come to the cited criteria in a moment (it depends on what’s being measured).

This sort of ‘triumph’ of Samsung could not be celebrated today; it was clouded by late(r) Friday news from a Texan court. Yes, patent trolls carry on suing Samsung with dubious patents and hours ago we saw reports about that [1, 2, 3]. It’s about a biometric patent or patents. And yes, it’s in Texas, so PACid, the plaintiff, is quite possibly a troll if not some major parasite. It wants almost $3,000,000,000 (no typo!) and it went after Samsung because it’s a leading OEM with many sales of Android devices. Speaking of Texas, in the Eastern District of Texas strikes again a Catalan university, exploiting the district in a get-rich-fast-type patent scam. Universities as patent trolls? No, IAM would not use the “T” word. Here is how its editor put it some hours ago:

Another tale of patent litigation with its roots in convergence is now being played out in the Eastern District of Texas. What makes this one slightly different to other stories is that its main protagonist is a small, Spanish company that was spun out of a Barcelona university back in the late 1990s. Earlier this week, antenna R&D business Fractus filed suits in Marshall against AT&T, Verizon, T-Mobile and Sprint, accusing them of infringing its patents relating to cellular base station antenna technologies.

Anyway, we digress. The point of this detour may be to show that Texas is where trolls go not for justice and companies go to defend themselves from injustice. Things are different in California, where Judge Lucy Koh does some good things these days (invaliding abstract patents) and is now being recalled by a longtime Apple v Samsung watcher. As he has just put it, “One month prior to yet another Apple v. Samsung trial, old and new disagreements on design patents surface” (headline). He ought to know this stuff, having covered it for nearly 8 years. Here’s the latest:

On May 14, Apple and Samsung will square off in court again. It’s going to be the third trial in their first California case alone. What makes it interesting is that it will involve a design patent damages determination (damages in this case amounting to a disgorgement of infringer’s profits) following a Supreme Court ruling in the same case. The exact amount of money that will change hands between Apple and Samsung won’t impact the parties’ positions in the smartphone market. However, it will be a signal to other design patent holders, including patent trolls. Should Apple be awarded a huge amount that Samsung could ultimately afford but the equivalent of which would potentially put many other companies out of business, design patents would be used in aggressive, extortionate ways.

Last week, Judge Lucy Koh ruled on the parties’ Daubert motions. Daubert motions and rulings are hard to figure out from the outside unless they’re just about numbers (such as damages claims that a court does or does not permit) because one would need to know the related expert reports to really understand the context. What became clear to me from Judge Koh’s ruling, however, is that she gave Apple various opportunities beyond the test proposed by the United States government in 2016 to argue that the relevant article of manufacture for a disgorgement of design patent infringer’s profits in this case is an entire phone, not just a casing. While Judge Koh adopted the broad lines of the DoJ’s proposed test, her Daubert order explicitly and intentionally declines to apply parts of what the DoJ had argued in its amicus curiae brief to the Supreme Court.

As we pointed out here many times before, Samsung tends to be more passive and defensive with patents. So we no longer view Samsung as much of a danger (if any).

Regarding Samsung’s stance in the US, the CCIA has just pointed out that “[w]hile IBM is the largest single corporation recipient each year, Samsung actually receives more patents than IBM when you include the various Samsung subsidiaries.”

Companies are filing for more patents every year—IBM received almost 1,000 more patents in 2017 than they did in 2016, an increase of 12% year-on-year. But, despite the fact that more patents are being filed for and granted every year, you still hear critics of patent reform claim that reforms have rendered patents worthless.

Samsung, IBM, Canon, Microsoft, Intel—these are all sophisticated users of the intellectual property system. They aren’t throwing money at something worthless; if they’re filing for patents, it’s because there’s value in doing so. And judging from all sorts of relevant statistics, as Patent Progress has previously covered, innovation is alive and well in the United States, including when it comes to patent filings.

A lot of IBM’s patents are worthless software patents.

Here’s a case — or IPR rather — against IBM patents (ZitoVault LLC v International Business Machines Corporation et al), based on prior art. The Docket Report put it explained:

Following two inter partes review proceedings, the court granted plaintiff’s motion for summary judgment that IPR estoppel under 35 U.S.C. 315(e)(2) barred defendants from asserting invalidity of previously instituted claims based on prior art that was known by defendants when they joined a third-party’s IPR, but which defendant’s failed to assert in that IPR.

There are many more patents like these which IBM loses nowadays. This barely happens to Samsung.

As IAM put it a short time ago, “Samsung’s patent portfolio is almost certainly the biggest in the world, it may also be the best.”

There’s a corresponding blog post and more behind a paywall. IAM, not IBM, said that “Samsung has the world’s largest active patent portfolio and among the highest quality ones, too, exclusive IAM-commissioned research reveals.”

From the summary:

In the IAM/ktMINE US Patent 100, published in issue 89 of IAM, we revealed that Samsung owns by far the largest US patent portfolio. Now, new research conducted for IAM shows that the Korean conglomerate not only has the largest portfolio in the world, but also one of the strongest. Below we provide a detailed analysis of Samsung’s patent holdings, including an examination of how the company has developed its assets and the most salient patent-related stories it has been involved in over the last five years. Patent portfolio breakdown With almost 250,000 granted patents worldwide….

We don’t typically wish to cite IAM, but in order to understand some things we keep track even of its spam from Japan (latest ad from Shobayashi International Patent & Trademark Office, or Satoshi Watanabe trying to sell services).

SCMP, which is now connected to the Chinese government through its new owner, wrote a few days ago about Huawei v Samsung. This shows how China uses patents to help the CPC-connected (the nation’s Communist regime) Huawei block/stop competition from Korea. We already wrote about these legal disputes many times before (LG has been driven out of China using such lawsuits) and here’s the latest:

A Beijing court specialising in intellectual property (IP) rights disputes has dismissed requests from Samsung Electronics seeking invalidation of Huawei Technologies’ certain patent rights on smartphones after an earlier local Chinese court decision banned sales of certain phone models from the South Korean brand.

The Beijing IP Court confirmed that Huawei’s patent rights on smartphones involved in the disputes with Samsung were valid and it denied any procedural violation in the previous patent review process, which had dismissed Samsung’s requests on the grounds of they lacked a factual and legal basis, according to a report by China Intellectual Property News on Sunday – a newspaper supervised by the State Intellectual Property Office (SIPO).

Well, SIPO and its aggressive/short-sighted approach will be the subject of our next post.

04.09.18

In Just a Few Years China Became the Eastern District of Texas

Posted in Asia, Patents, Samsung at 2:22 am by Dr. Roy Schestowitz

That’s only acceptable for those who have very deep pockets and many patents (Foxconn has about 80,000)

Foxconn

Summary: The patent creep in China, or the emergence of patent maximalism in the wake of trade war fears, means that operating in China has become very hard both for domestic firms that aren’t already well-established giants (with connections to the Communist Party) and for foreign firms

According to Megan Rourke and Eric Podlogar, the biggest “patent portfolio stakes” in the US are no longer IBM’s but Samsung’s. We don’t know how they measured this (there’s a paywall), but we heard similar things elsewhere (earlier this year). The numbers shared by the USPTO do not agree. Samsung, as is widely known, is not aggressive with patents. It’s usually reactionary or defensive, i.e. if will sue back if sued by somebody else first. Several years ago Samsung was ‘top’ of EPO, but that is no longer the case (even LG, the other Korean giant, outpaces it in the latest annual report).

“Samsung, as is widely known, is not aggressive with patents. It’s usually reactionary or defensive, i.e. if will sue back if sued by somebody else first.”The other day we saw Docket Navigator bringing up Imperium IP Holdings (Cayman), Ltd. v Samsung Electronics Co., Ltd. et al.

Patent trolls that are apparently based in the Cayman Islands go to the Eastern District of Texas (TXED/EDTX) to blackmail companies using patents and guess what Texan judges are saying:

The court granted plaintiff’s motion for over $7 million in attorney fees under 35 U.S.C. § 285 and rejected defendants’ argument that the fees should be reduced by 33% on the ground that one of the patents-in-suit was found to be invalid as obvious because the hours billed were inextricably intertwined.

So Samsung is now being ‘burned’ in the US in the same way that it already got ‘burned’ in China. IAM recalls: “Between May and October 2016, Huawei and Samsung filed a total of 42 patent infringement complaints against each other in China (each asserted patent gets its own separate case there). Another separate case deals with “rate-setting and royalty payment” issues. In all Huawei asserted 20 patents against Samsung – 13 standard-essential patents (SEPs) and seven non-SEPs. Samsung responded by asserting 22 patents against Huawei – 14 SEPs and eight non-SEPs.”

“Patent trolls that are apparently based in the Cayman Islands go to the Eastern District of Texas (TXED/EDTX) to blackmail companies using patents…”In many ways, China has become the ‘new’ Eastern District of Texas. Patent trolls enjoy phenomenal growth in China and that’s an issue which bothers everyone, except the likes of IAM, which is a lobbyist for patent trolls. Here is what it wrote some days ago about the gigantic Hon Hai Group (1.3 million members of staff as of 2015, according to Wikipedia):

Last week, this blog reported that litigation activity is heating up in China’s hyper-competitive display industry. Among the signs: Foxconn panel unit Innolux filed 17 patent suits against mainland competitor HKC in February. A look at USPTO assignment records shows that HKC probably saw the writing on the wall, and is moving quickly to shore up a relatively light patent position. The Hon Hai Group, of which Innolux is a part, is one of the world’s biggest patent owners (PatSnap estimates its holdings at around 80,000 rights globally).

Mind these ridiculous numbers. 1.3 million members of staff notwithstanding, there’s a similar number of patent filings in China per year. The scale is insane.

“China’s attitude towards patents is problematic because it also harms small Chinese companies and drives away foreign investors.”China’s patent maximalism continues to fascinate if not excite IAM. Here’s another article IAM has just published about China (“How do foreign parties really fare in Chinese patent litigation?”), noting a few days ago that China also embraced SEP-based injunctions (embargoes against rivals that merely follow industry standards). To quote:

The Beijing Higher Court has handed down its long-awaited decision in what is thought to be China’s first-ever SEP injunction case. In IWNCOMM v Sony, the second instance tribunal rejected the Japanese company’s appeal against the decision of the Beijing IP Court back in March 2017, which saw the award of 9.2 million RMB ($1.3 million) in damages to the Chinese company, and the imposition of an injunction against Sony to halt manufacture and sale of 35 mobile devices.

So Sony (Japan) is another example of a foreign company being screwed by China’s patent maximalism. It’s not just Korean companies like Samsung and LG, which left the Chinese market due to all that litigation. China’s attitude towards patents is problematic because it also harms small Chinese companies and drives away foreign investors. Who benefits? Law firms and massive corporations that are connected to the government.

03.18.18

China Has Become Very Aggressive With Patents

Posted in Antitrust, Asia, Patents, Samsung at 11:27 pm by Dr. Roy Schestowitz

The Communist Party of China (CPC) has a protectionist plan and a shared agenda (not just tactics) with Battistelli, who significantly lowered patent quality for the sake of raw quantity

Pooh the Bear and EPOSummary: China now targets other Asian countries/firms — more so than Western firms — with patent lawsuits; we expect this to get worse in years to come

KOREAN giant Samsung, which employs an extraordinary number of people, has traditionally been one of the top patenters (if not the top patenter, e.g. in 2012) at the EPO and USPTO, not just KIPO. Sure, it fell behind LG (the ‘other’ South Korean giant) this past year at the EPO, for whatever reason (we don’t want to speculate).

“China’s patent aggression is a growing problem and it’s like nothing we ever saw in Japan and Korea (traditionally of the patent ideology of live and let live).”Samsung, at least traditionally, is not patent-aggressive. In other words, it rarely sues anyone except if sued first. The same is said about Korean culture in general. Some time ago China began assaulting LG with patents — to the point where LG withdrew/pulled a lot of its business out of China. Samsung too came under many attacks in China and then it retaliated, even in the US. The latest in this retaliation? Florian Müller reports on the injunction against Huawei (highly CPC-connected firm):

A few days ago, Law360.com reported that United States District Judge William H. Orrick (Northern District of California) expressed an inclination at a Wednesday hearing to grant Samsung’s motion seeking to bar Huawei from enforcing a couple of Chinese patent injunctions before the U.S. court has determined whether it is, in light of its FRAND obligations, entitled to injunctive relief.

You won’t be surprised if you’ve been following the case here. Two weeks ago I published a post here with a headline that contained the following prognosis: “antisuit injunction looms large”

Even though I’m just a little blogger, it’s a bit daring to offer such a prediction based on the briefing record, especially since antisuit (here, actually just anti-enforcement) injunctions don’t come down every day. But for the reasons explained in my previous posts, above all Ninth Circuit case law, Huawei won’t be able to complain.

China’s patent aggression is a growing problem and it’s like nothing we ever saw in Japan and Korea (traditionally of the patent ideology of live and let live). A few days ago Managing IP wrote:

Big changes to the intellectual property office, including combining the enforcement functions of trade marks and patents, are expected to strengthen IP enforcement in China

Managing IP speaks of “administrative overlap” at SIPO. The main issue with SIPO, however, is not “administrative overlap” but really low patent quality which already causes patent trolls to soar there and few large Chinese firms (which can afford to fight trolls in court) to merely consolidate power.

“…expect Xi and CPC to try to leverage their ‘soft power’ abroad with patents.”China isn’t what patent maximalists claim it to be (we wrote many rebuttals to that effect recently) and the number of granted patents says little about innovation. Chinese patents at European and American patent offices are basically the ‘best of Mandarin’ (SIPO patents translated, sometimes with help from foreign workers). Those are the patents that are probably actually worth something.

Either way, expect Xi and CPC to try to leverage their ‘soft power’ abroad with patents. They know that trade sanctions are imminent (if not already in tact, e.g. tariffs), so it’s a form of deterrent or counterattack.

03.10.18

Judge Koh, Famous for Her Apple/Samsung Rulings, Pours Cold Water on Haptic Technology Patents While China is Sought as Alternative Litigation Venue by Iancu-Connected Immersion

Posted in America, Apple, Asia, Patents, Samsung at 8:11 am by Dr. Roy Schestowitz

Appointed by Arnold Schwarzenegger

Judge Lucy Koh

Summary: Judge Lucy Koh, an American judge with Korean heritage, throws out patent claims on haptic feedback approaches and Samsung, Korea’s largest technology firm, is being dragged to court in China over haptic feedback approaches

THE USPTO is getting tougher on patents. The courts even more so. Just because something had been granted as a patent and was later used in a lawsuit (even successfully) does not mean that PTAB or court judges will blindly accept the claims. They’ll investigate further. Burden of proof is on the applicant/assignee/claimant.

With all the mobile or “smart” hype, which includes haptic techniques, it’s not surprising that few firms look for a ‘jackpot’, knowing that there are billions of devices out there and thus possibly a lot in ‘damages’. If they get lucky…

Andrei IancuDays ago Patently-O wrote about Fitbit’s patent challenge, noting that Immersion’s patents are not that good. We wrote about this case before and noted that Immersion is connected to Microsoft as well as the USPTO’s new Director [1, 2]. Appointing this man who is connected to Trump professionally was a colossal mistake, but it’s too late to change that. Either way, “[o]n 12(b)(6) motion for dismiss, Judge Koh has thrown out some of Immersion’s asserted claims covering various haptic feedback approaches,” Patently-O wrote.

How does Apple feel about it now? Immersion does nothing but patent lawsuits these days; what does that make it?

So guess what Immersion is doing. It’s suing Samsung in China as well as at the Eastern District of Texas:

A US technology company has said Samsung’s touchscreen products including the Galaxy S8 infringe patents related to haptic (touch interaction) technology.

Immersion announced its lawsuits against the South Korean electronics company yesterday, March 8. They were filed at the US District Court for the Eastern District of Texas Marshall Division and the Fuzhou Intermediate Court in China.

Considering the fate of Immersion’s patent aggression, one might think this new lawsuit in the US will go pretty much nowhere:

Leap Motion Hit with Patent Infringement Lawsuit from Same Company Suing Meta

[...]

Patent holder Genedics, LLC has filed a legal complaint alleging that hand-tracking startup Leap Motion is infringing on its intellectual property.

As its name suggests, it’s little more than a parasite looking for a buck. It does not even have a Web site, just a bunch of lawsuits with its name on them.

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